RE:Employee costsHi Extreme,
The reason for buying in I believe rests with the total liquidated value of the company against the current share price. We know the book value is much higher than the current market cap. Lots of arguments to be had about how you assign value to all of the assorted assets and investments, but there's no doubt the shares are worth far more than $.59.
The dividend will either be restored at 7.5 cents per annum and suspended payments will be made to shareholders or the Voting Trust will sell. In any event, it is hard to find a company where the market cap equals cash on hand and the balance sheet has no debt.
There are lots of reasons to be cautious about the investment, not the least of which is the trajectory of revenues and profits, the Voting Trust and senior management.
The Voting Trust is on life-support and someone is going to trip on the cord and close out their disastrous stewardship of Torstar.
Senior management can be remedied with new ownership and enlightened leadership.
The revenue challenge is solvable with the right content strategy and overall leadership to steady the ship. Profitability will follow a complete reset of the cost structure and an industry product rationalization process with the requisite consolidation of players.
I believe Fairfax or someone will follow this path. They will make an offer the Voting Trust can't refuse and give them a graceful exit. Going out with nothing is a very ignominious ending, even for them.
MW